Qantas said it was altering the path of some of its international flights in the area as a result of an ash cloud.

Spokeswoman Sarah Algar said: "Flight paths between Sydney and Narita (Tokyo) and Sydney and Shanghai have been altered as a result of the volcanic ash cloud over Rabaul in eastern Papua New Guinea.

"The QF21, QF22 and QF130 will now fly over central Papua New Guinea to avoid the cloud."

Authorities have not issued an evacuation order for the town closest to the volcano, Rabaul, which was destroyed in 1994 during a previous but more severe eruption. So far there have been no reports of injuries.

"People still live here, we have to get on with our daily lives," Rabaul Hotel employee Susie McGrade told Australia's ABC radio.

"We're up on the rooves, cleaning off the ash, we've got to save our property, try and get back to normal, so what can we do? We've got no where else to go."

Iceland issued its highest alert level for a volcano on Friday.

Bardarbunga started rumbling about a week ago, signalling trouble for air travel in northern Europe.

In 2010, an ash cloud from the Eyjafjallajokull volcano closed much of Europe's airspace for six days.